Excellent Balance Transfer Card

Will Using Balance Transfer Credit Cards Lower My Credit Score ...

We are asked this question on a regular basis and the answer is yes, it probably will. The caveat is how much will it hurt the scores, for how long, and is what I can do to keep my credit score down? Sometimes the benefits outweigh the credit score dip that should be measured by each card holder as it applies to their specific situation. There are also some tips and tricks that may help you significantly when you apply for a credit card balance transfer or any other card elsewhere.

First a warning, the credit score formulas that are used by the three credit repositories differ by each company and are as well protected as Fort Knox. It is virtually impossible for anyone to give exact information concerning credit scores however, a very close generalization is possible.The information I share in this article is based on my observations and experiences obtained in my fifteen years working in the mortgage and financial markets. I think this information is true and factual at the time of writing, but does not guarantee or warranty on its accuracy.Sorry, the legal aspect, now let's get cracking.

The credit score dip to request a credit card is estimated from 1% to 10% of your normal score depending on different factors on your credit report. If we assume a 720 credit score this means your score could be derogated by as little as 7 points and as many as 72 points, again these are estimates. I noticed that those who are most affected tend to be people who have an abundance of credit cards with balances already high. About 30% of your credit score is derived from credit to rates of pay.Meaning if you have a credit limit of 00 and 00 balance you are considered a higher risk.

The credit of the optimal balance is 30% - 50% depending on the repository that rates you. It means having a balance 00 on a credit card that has a balance 00 have a positive effect on your credit score and balance 00 has a negative effect. I have seen borrowers actually open a new credit card just for the purpose of lowering this ratio and raising their credit ratings, and it worked.In fact, it worked so well that they qualified for a mortgage entirely different that has saved more than 5 months! If you are working on or considering taking a mortgage please consult your loan officer before making this decision.